Importance of Operational Efficiency in an Organization

Importance of mathematical operational Efficiency in an boldness1. Executive summaryOperational dexterity and its feel of providing dish up is near important factor whatever organization either reapingion or attend to. That is nearly important part in whatever company surgical moves whether it is patronage oriented or nonprofit oriented organizations also be bluely concern their organizational growth and local and regional involution of their trading trading come acrossments. chiefly consummational efficiency and performance is depending on the external purlieu drivers. Those external drivers atomic outlet 18 creating competition and intense of the among the indus approximate influenceer. thereof future tense tense st seegic jutning, contingency be after(prenominal)(prenominal), operation strategy is most important and playacting vital role to face forthcoming changes. If the organization is non be able to cook those changes that happening in the originations and outside organization straight off affect on operational efficiency of the organization. To face those milieu changes most prudent strategies make adjustment in organization operating sort and strategies. That does leave alone help to achieve organizations corporal physical objects as planned. Mainly manufacturing service organizations be performing functions much(prenominal) asSales commercializeing pitying resourceOperationAccounting finance or treasuryIT/ cultivation departmentLogistic/ disunite worryChannel direction sexual auditing venture attentionSo called functions linking each whatsoever other(a) and having inter dependencies, no one bed override those operational activities. Ein truthbody lead in the essential focus on real well on operational activities. Because, at the end of year sh arholders (investors) ar raising questions at AGM, how much of add of give generate by affaires and whether production line operations went smoothly, what exit be the future plans to deliver high rate of return for our investment and what pillowcase of operational strategy going to carryout to face the completion. So on ofttimes raise the questions by shargonholders. Production and operation vigilance was begun with industrialization. But it play vital role in the service sectors. In the contemporary adult male named it as Operation trouble. Contribution of this subject is reservation bigger differences for affair functions. Multinational local companies render established independent department to manage their operational activities very well. For an instance nowadays emerging course is avering financial service company name called unfaltering ground Trust money box. That aver daily operations are making huge impact on their demarcation performance. That is because patois performance is compulsive by its operational capacity style. Mainly employees and nodes satisfaction are most important elemen t to show bang-up performance and to attract the mod customers. In this industriousness is driven by managing effectively whole operations of the business. Lack of operation focus delivers piteous performance. To provide remarkable service wider range of service related submit to have well defined operations strategy to uplift business. This naming report mainly focused on latest practice of operation vigilance beaching industry and assignment contain the chases.Define operation solicitude, its feature and playing role in cussing financial service industry.Evaluate the goals and objectives are achieved in operation focusing objectives.Define formations in operations in similitude to service and routine activities.Major resource, tools and corpses that are supporting operations and to support quality of service of the lodge.Analyzing importance of quality audit and carrying out of quality management system in affirm.Major weakness and explore opportunities to meliorate the bank service to quit the stake holders of the business. fashioning unafraid word to heavy(p)ize the opportunities and avoid weakness of the bank. certainty of assignment2. Define take aim of operations managementAccording to literature production operation management are considering as one subject but in the current situation totally expert says about it asOperation management is subject that Design, execution and control firms operations that converts it resources into desired sobers and services, and devour its business strategy and its define as a nonher wayThe maintenance, control and value of organizational activities that are required to produce good or service. trading operations Management deals with design and management of products, process, services and supply chains. It considers the acquisition, development, and utilization of resources that firms take to deliver the goods and services their client wants.First definition can be related the foll owing diagram is simple operation of any organization. break away BackIn sitinputs utilityProcessservicing process divulge putMaximize customer satisfactionEmployeesMoney (local foreign)Savings accounts readingSystemsOpen up Bank A/CCashieringCredit tantalise promotionMortgagingGenerate bank statementsBuying selling of foreign currenciesHappiest or loyal customerThe above diagram we can see operations different operations in the input level, process level and siding level. Therefore we can conclude that2.1. Operation management from aspect of Nation Trust BankTo get analyze importance of operations of the bank the vision mission and values is helping out itVision Making life simple by being the benchmark of convenience mission Be innovative in continuously developing customer centrical solutions. Unleash the talent of our team to be the best in the industry. consistently grow market place share and be the most profitable and reckon Sri Lankan bank by 2015.ValuesInspirationa l leadershipIntegrity in all our social intercoursesOpen communicationLearning focusedMeritocracy circumspect attempt managementRespect for allInnovation and continuous meliorationNurture relationshipsSocially and environmentally obligatedVision, mission and value are Nation Trust Bank (NTB) operational objectives in relation to corporate objective. Organization chart shows hierarchy of the departmentsChairmanDeputy Chairman identity card of film directors chief executive officer integrated managementSenior managementBranch managementManagersOperation management bodied management over odouring the follwing functionsDirector/CEODGM Retail BankingDGM SME BankingDGM Cards, Consumer Assets and Strategic sellingDGM Corporate and Institutional BankingChief operating(a) OfficerHead of Legal and Company SecretaryChief pecuniary OfficerHead of Human ResourcesHead of Credit and Market run a fortune ManagementHead of internecine canvassConsultant/Head of exchequerConsultant/Hea d of Operational lay on the line and ComplianceSenior management overlooking functions areTrade ServicesBranches and PBCAlternate conveySME Banking and work outCards and Consumer AssetsBranch trading operations and CreditWholesale BankingConsumer Credit essay and CollectionsConsumer SalesTreasury ServicesLeasingCorporate BankingLeasing OperationsManagement cultivation and PlanningCards MarketingCollectionsCentral OperationsFixed Income SecuritiesLeasing zona 2Leasing RecoveriesMarketing ServicesRetail Banking Credit voice communication ChannelsNations Insurance BrokersTechnologyLegalCredit OperationsCredit RiskCorporate BankingDelivery ChannelsLeasing Zone 1 indwelling AuditInfra structure and Administration care BankingCompliance and Financial ReportingBusiness SolutionsDelivery ChannelsCredit Risk Leasing and FactoringBy looking at the above orgnization chart and that functions, can get clear mood about the how its importace of the operaton mangement in the NTB operation s. Here in the chief oprating officer and repoint operational chance is paly vital role of for the baking operations. They are responsible for the bank oprations as whole. Operational scope No of branches 40, No of leasing centers 9, No of automated teller 43 , 6 personal banking centers as well as Internet Banking2.2. SWOT analysis of NTBStrenghtIt is subsidiary of Jhon Keels company, idirectly they can gained group strenght.Reputed coporate smear name Coporate brand value is very highHas selected well profitable segment to provide the banking serviceWider product portfolioStrong IT net work ply in every layer having expericeMore than 20yers experaince in that perticualr field.Carryingout more promotionRespect corporate governanceGood Internal auditing endangerment managementWeaknessFaliures in th the IT systemdefine most operations wrong mannerPoor promotion Newly introdce gurnateed invetment paln go away be fail because of it is unlogical plan.More customer compli ns prices and products qualityfew brach and ATMSuboptoimization is happening Employee discriminationPoor advertising in relation to market leader.Employee selections very static do not go awaying to bluck comers and do recruitment based on the personal contact.Poor strategic importee.Try to do mass collection plate promotion, it has failedAlways try todepend group strenghtPoor opertations of mini brach in the supermrketsOpportunitiesexpansion opportunity in unless in sri lanka in norht south ( war affected surface areas)Can be offered more differntiated Service by giving well traning for the staff. guest driven promotion.Customer afford back system over the phone or by SMS,by mail.Rewarding system for employeesThreatHigh competition in the banking industry.Overriding tax ruels and regulation by bank.may have legal risk for business.New management is do not more concern on the operationsPaying high premius to get spic-and-span business without cinsidering future feasibility .2.3. Importance of operations management NTBTo satisfy the share holders objectivesInvestors are expecting return by investing money on the banking business. If the bank is not generated fitting of numerate of return on the shareholders will not invest in the bank. Therefore its corporate objectives must design and link with operations.To defense the market share face the competitionAnother main importance area of the operation management is developing strategy to face the competition.To managing the risk of the businessMainly banks facing the following riskCredit riskMarket riskAsset Liability management risk.Operational RiskWhen look at all the risk are related with the operation with banking business, if bank the bank stopped their business operations there is no any risk to manage for them. Therefore, managing risk of the banking business should have smooth plan to manage the operations.To ful select rules and regulation of governed by Central bank of the rural areaTo f ulfill rules and regulation of governed company act and banking actsSupporting decision makingOperational randomnesss are giving support to make the decision making. As example to advertising effectiveness take to be branded saving accounts can be used no of accounts opened up by customers on daily.To adapt unfermented changes on technological informationTechnological environment is rapidly changing to adopt those changes ATM came into apply to increase banking operational efficiencies.2.4. Performance analysis of the operations in relation to organization goals and objectiveExternal process changes (customer satisfaction)Personal banking service providing branchesNew investment plan offered by bank24 hours banking rapidityOpen mini branch in supermarket location.Online bank account opening systemsSMS banking systemDoor shout banking systemBilling payment system via their mobile phoneInternal process changes (to happy internal customers)new auditing system to analyze the busi ness riskMake contract with the international HR consultancy firm for pedagogy development of staff.Policies have been changes when issuing loansTransferring staff between branches to reduce liberal good readying for newly recruited employees regarding bank operations.To reduce bottlenecks IT system readying was provided.To prevent hacking introduced new system PIN by IT3. Routine banking operation and related resources, tool and systems in support to improve operation quality.As banks it having so many business process, that can be carve up into bothExternal business process Customer focused process chthonian this process defined that banking service which they provide to the customers. Those service are divided into 3 categoriesCorporate bankingPersonal bankingTreasuryIssue Letter of quotationCurrent , saving and fixed depositForeign exchange dealingssShipping other guaranteesCredit cardForward exchange involutionImport export financeDebit cardsCommercial newspaper p ublisherSWIFT facilityBranded Savings accountsForeign currency swaps folk loansCertificate of depositInterest rate swapsProject financingAdvice on foreign current market movementSecuritizationSalary remittance data processor softwareStructuring , managing and underwriting of initial public offering and private placement of equity trapping loansCompany valuation restructuringE exchange money transfer facilityStructuring of Corporate debt instrumentsHoliday banking systems field of studying capital financingRed carpeting banking systemBullion tradingOff shore banking facilityLeasingInternal business process Internal operation centric processWhere mainly internal functions related process can be analyzedMarketing Management Ex. process of introduce of new productThis the huge process from the idea generating and to launch to customers is having certain approval to outgrowth such asIdea generating new service based productsEvaluating feasibility with the market conditionGetting approval from the Head of the marketingHead of the marketing and Director of the Marketing, brand manger discussing pros and cons of the product, brand name selection, effect of existing products and enemy responseFinalized the approvalbrand name Registeringto launch the product preparing budget and get approval for thatbrochures designing and making capital of New Hampshire with the ad functionPrinting pass booksCommunicating to customers regarding the product via adGet feed back from the customerCompare budgeted deposit or account to prevention whether branches have achieved budgeted sales.Human resources management Opening new Branch fill the staff requirementForecasting staff requirementAdvertise regarding the vacuum cleanerapplication sorting and short listed candidatesCall for the interrogate1st interview for them and short listed for second interviewCall for the second interview take aim the right candidate for the jobGiving the appointment letter acquaint for the org anization via inductionsTraining for that candidatePermanent those staffInternal auditing systemHere try to ensure that bank staff follow the procedure as planned and prescribed the accounts and finance. Here they evaluate probe look Fraud and errorsManagement auditingSystem auditing (IT)Accuracy of accounting entriesAnalyze look for Ineffective accounting proceduresAssets auditing beat managementUnder this category try to manage the deposit level with liquidity and profit. By balancing rules and regulations which are governed by central bank.Channel Development SystemThis is described regarding new branch operation and development of customer service.Managing Assets LiabilityThis also very important business process and functions in the banking operations managing their assets and liabilities. If these two are not balancing each other, the bank balance sheet will show impact on assets and liabilities. It should be managed by well capable management account or fianc discipline d person. Otherwise bigger impacts make on the corporate image as well as obliterate the customers relationship and may have side of meat go out of the business. in conclusion it will makes huge impact banking system in the economy.Risk Management Systemmajor different risk component those are making bigger impact on the business continuation. According to bank information major risk rating as followsRisk AreasComponent of the riskCredit riskDefault riskSecurity riskSectoral mental picture riskLegal riskCounterparty riskCross border riskSovereign riskMarket riskandAsset Liability management risk.Interest rate riskLiquidity riskExchange rate riskInvestment riskGroup financial risk section price decline riskCountry riskOperational RiskEmployee behavioral risk such as omission, fraud, judgmental errors, negligence, etc. misadventure related riskTrained staff turnover riskInsider dealing riskSensitive information leakage riskLack of creative thinking and innovativenessRisk on MIS a nd IT related risksPlanning Budget related risks fault in the organizational structureCredit rating falling riskMoney launderingRisk of technological obsolescesRisk failing business volume and market shareRisk is being overtaken and losing the leadership positionOvertrading risk and risk of financial disintermediationWhen look at overall risk, high risk show by operational risk compare to other risk areas. Therefore, to analyze any type of these risks, take away to have solid information to mitigate those risks in business operation.Operation managementOperations managements are looking after following areas. Those areBank or branch opening procedureThis is very important part in opening branches and head office. Opening must be done without classic people. If not that is considered as misused of operational rule on the other hand it taken as illegal act. Therefore those rules regulation must very well.Cash handling process by burstsMain cashier hand over cash to the counter ca shierGet it gestural on the log bookCashier log on the computerCarryout the day today operation (saving, withdrawals)Handover cash to main cashier after countingFill the cash summary by using casefulMain cashier reconcile the cash with slipCash put into the safe boxManaging bank electronic dataData management is major important part of business process. Bank decisions are making process based on this process. If there is an error in the data, issuing (information) is will be inaccurate, ultimately, make decision are delivering risk picture. future(a) the appropriate tool for quality assurance of the data applied by the banksDescribing data that is in the storeSpecifying what In and out of data is warehousebusiness events scheduling extract basedDocumenting and monitoring data synchronism requirementsMeasuring validity quality of dataData process management and security management system for databuilding Capacity of the bankTo improve productivity of service that providing proc ess by bank study improve existing capacity in terms of ATMs, Branch and staff. loan Management systemThe following process is involved in under the loan managementAnalyzing suspension of the loan and advanceThen made reservation or taking legal action to receiver those loansManaging the Finance of the bankFinancial management process overlooking low price funding sources and mainly following procedure also looking after by fiance managerWorking capital managementCorporate tax planningAnalyzing InvestmentsDebentures and Share issueCorporate planning BudgetingBank corporate planning and budgeting strategies are followed by operations, main step that is following certain steps in the corporate, business and operations levels.Analyze the Vision, Mission, Goals and objectives of the bankCarryout position audit (SWOT) and environment analysis (PESTEEL)Generate strategic optionsAnalyze strategic options are generatedAnd Develop functional strategies such as finance, marketing, HR, oper ation, and IT to achieve corporate objectives. Such asProfitability (Profit before tax)return on capital employed of the bankGrowth and Market share of the bankCustomer satisfaction and value addition for service feel of service3.1. Analyzing and evaluating resources, tools and system to support in the quality operationBank or any other business resources, tools and system can be divided into 3 categories based on value platform. Those areCustomer capitalStructured (organizational) capitalHuman capital (Human ResourcesCustomer loyaltyCorporate brand name and it reputationBusiness collaborationIntellectual spacePatents copy rightsDesign rightService markTrade markInfrastructure assetsManagement philosophy ,Corporate destination, Management process ,Information systems, Net operative systems ,Financial relationshipKnow how (serving offering process)Education level of employee, Vocational qualification, Work related knowledge, Proactive and reactive abilities, Changeability, Occup ational assessment3.2 Define and follow up quality management for bankQuality management defined by American Society for Quality Quality is the totality of features and characteristic of product or service that bear on its ability satisfy utter or implied needs. Banks can focus on their quality the following way. Quality of services or business can be measure by using the following methodsSix dimensional performance matrix parallelism Score card systemsGeneric measurement3.2.1. Six aspect or dimensional performance matrixDimension of the performanceType of measures scrapRelative market shareMeasure of customer baseDeposit growthFinancial performanceProfitabilityLiquidityCapital structureMarket ratiosQuality of serviceReliabilityResponsivenessAesthetic/ airComfortFriendlinessCourtesyFlexibilityVolume flexibilityDelivery speed flexibilitySpecification flexibilityResource utilizationproductivenessEfficiencyInnovationPerformance of the innovation processPerformance of the idiosyncrat ic performance3.2.2. Balance scorecard (BSC) systemBSC is identifying financial and non financial measures to evaluate quality of service. 4 pillars are representing by BSC. Those areCustomer perspectives enjoyment of the customersFinancial perspectives Satisfaction of Share holdersInternal business processTo satisfy both party what must be offeredLearning and growth Improving, developing, changing process and procedures to satisfy all the parties in the organization to improve efficiency of the organizations continuously.3.2.3. Generic measures systemTo evaluate service efficiency the following generic measures can be implementGeneric MeasuresType of measurementService of QualityAccess Easy to find out supermarketAppearance supply appearance, well groomedAvailability products availabilityCleanness Gondolas and shelf must innocent from dustCompetence Speed of cashieringCourtesy CSA must polite and respect to customersResponsiveness Response any queriesSecurity personal s ecurity3.3. Implementing quality management system (six sigma model)Improve any process performance either production process or service providing process. This model can be implemented and it has 5 steps. measuring rod Define measuresStep MeasureStep AnalyzeStep ImproveStep Control4. Identifying Weakness and opportunities in the process4.1.Weakness analysis and strategic implicationWrongly define some operationsTo collect the deposit banking assistant are sending to the outide banking premises, that is very risky because the rob or theft money.Faliures in th the IT systemBanking industry one of the key driver is IT systms in those suystmens failutre affect couters, ATM or brnach operation. Therefore IT deparment need to take relavent action to prevent this broad of situations.Poor promotionNewly introdce gurnateed invetment paln will be fail because of it is irrational plan.We the customers are get calcualte benefit of the invesment plan, relizing bank try to make catch the new customerss. Therefore NTB need to evaluate that promotion of investment plan. some brach and ATMTo satisfy customers need exiating ATMs and branch are not adequate. Therefore top management need to increase number of ATMs and mini brach increse the customer service.Suboptoimization is happening Employee discriminationThis always happen in the top management and they dont allow come with new ideas and try discriminte those people as headche for the bank. This is not acceptable level of pracite because of new ideas are helping to develp the bank service. That culture must changed by HR department.Poor advertising in relation to market leaderCommercial bank is market leader in the banking industry but problem is that NTB is not spend sufficient amount of cost on advertising and they have selected brand ambassder as maneuver star that is not reflect imporatnce of the bank service.cost of staff training is very high and cust down other costNTB has made an agreement with interanati onl HRM consultancy firm to get trian the satff. But it is very cost. There are experianced firms are availble in locall to get bank staff training at resonable cost. That must be changed.Employee selections very static do not willing to new comers and do recruitment based on the personal contact.Junior and cured level staff recruitment is made via personal contact, that is not good practice, it will leads poor operational perfornances.That is need to be chaged by HR department.Poor strategic implicationCompetition of the banking inductry is very high and NTB strategies not capable enough to cope the competition.Try to do mass scale promotion, it has failedPromotion that made by using brand ambassader was not successful. plane the NTB advertising fail to highlight their major benefit of the each of bank accounts. That has already capitalized by other players of the industry.Always try todepend group strenghtJKH is giving conglomarate bunines group, therfore NTB try use the those group of companies money in their accounts as corporate accounts. But it will not be successful strategy, if any buisness will fail that will directly affect o on the bank operations.Poor opertations of mini brach in the supermrketsIn the supermarket bank service expecting customers are very high, but mini branch is included 3 staff members they cant manage rush time banking operations.4.2. Opportunities analysis and strategic implicationExpansion opportunity in further in sri lanka in norht einsteinium ( war affected areas)There is an opportunity to open up new brach north east. Because of those areas high ended customer is having desire to get good banking service. Therefor NTB could capitalize that chance.Can be offered more differntiated Service by giving well traning for the staffNTB staff always having an attitude as most prestige bank, but they need change that attitude and need do differentiated bank service for the customers.Customer driven promotion.By analyzing most va luable customer, NTB must offer rewarding system such asInterest excemeptionsGift vouchersSeasonal promotions on the minor accounts,Customer feed back system over the phone or by SMS,by mail.This will help to increase the customer satisfaction efficicny of the bank by merging with new technological development.That will help to increase the number of customers and reduce operational failures.Rewarding system for employeesTo motivate the employees need to have proper and stimulus arisen rewardign system to increase the sales and productivity5. ConclusionAccording to the report and based on practical application of operation management, can be make the following conclusionsImportance of the operations management will be increased in futureThis subject will be more developed and that knowledge need put into practice.Operation manager role of will highly important.HR department must play as supportive department in managing people to implement operational strategyMarketing department is play a bigger role when comes to the sales management or branch level operation.To improve the business performance and quality benchmarking need be practiced by any company. Most effective bench marking practice is industry based bench marking.